No sign of easing in capital controls even as China’s overseas shopping spree continues, experts say

Beijing shows no signs of loosening its capital controls on overseas investments even as more Chinese firms pour into the European and American real estate markets.

“I don’t see any relaxation of policies. They’re still very strict,” said Paul Guan, a partner with global law firm Paul Hastings, which specialises in advising Chinese institutional investors on outbound real estate investments.

The firm recently represented China Minsheng Investment Group’s property arm SRE Group, a Shanghai-based developer listed in Hong Kong, in its US$88 million acquisition of 75 Howard, a harbourfront condominium development in downtown San Francisco. The deal was completed last week and is the developer’s first project in North America.

China has been implementing tough measures to restrict outbound investments in the face of accelerating capital outflows since late last year. The measures include banning overseas investments of more than US$10 billion, forbidding mergers and acquisitions worth more than US$1 billion that are outside a Chinese investor’s core business and halting foreign real estate deals by state-owned enterprises involving more than US$1 billion.

But headline-grabbing cross-border deals have continued regardless.